In a major move to tackle unemployment and boost formal job creation, the Government of India has unveiled its most ambitious employment initiative yet — the Employment Linked Incentive (ELI) Scheme. Approved by the Union Cabinet, the scheme aims to generate over 3.5 crore new jobs over a two-year period.
The ELI scheme will be launched on July 1, 2025, and will remain in effect until July 31, 2027. The scheme is designed to provide direct financial support to companies that expand their workforce, with a special focus on first-time employees and the formalization of jobs.
Addressing a press conference, Union Minister Ashwini Vaishnaw announced that the government has allocated ₹1 lakh crore for the implementation of the scheme. “This is the largest job creation programme in the country’s history. Experts from across sectors have contributed to shaping this scheme to ensure maximum impact,” he said.
The ELI scheme will target employment growth in key sectors including micro, small and medium enterprises (MSMEs), services, manufacturing, and technology. It will provide financial incentives of ₹3,000 per month per new employee to companies hiring freshers or those entering the formal workforce for the first time.
These incentives will be distributed in two phases:
Phase 1: Support for the first six months of employment
Phase 2: Additional support for the next twelve months
By offering structured incentives, the scheme aims to encourage companies to expand their workforce while helping young individuals enter the formal job market. The government believes the ELI scheme will not only create millions of jobs but also strengthen the formal employment ecosystem and improve long-term economic productivity.
Industry leaders and economists have welcomed the scheme, calling it a much-needed intervention to boost employment amid changing economic dynamics.